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First Quarter 2013 Key Figures

Net Revenue $3,464 million, +7%
Operating income (EBIT) $493 million, -2%
Net income¹ $225 million, -39%²
Earnings per ordinary share $0.74, -40%²
 

1 Attributable to shareholders of Fresenius Medical Care AG & Co. KGaA

2 The corresponding number for the first quarter of 2012 includes an investment gain of $127 million

Fresenius Medical Care AG & Co. KGaA (the "company" or "Fresenius Medical Care"; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, today announced its results for the first quarter of 2013.

Revenue

Net revenue for the first quarter of 2013 increased by 7% to $3,464 million (+7% at constant currency) compared to the first quarter of 2012. Organic revenue growth worldwide was 4%. Dialysis services revenue grew by 8% to $2,678 million (+9% at constant currency) and dialysis product revenue increased by 2% to $786 million (+2% at constant currency).

North America revenue for the first quarter of 2013 increased by 9% to $2,287 million. Dialysis services revenue grew by 10% to $2,104 million with a same store treatment growth of 4%. Average revenue per treatment for U.S. services increased to $359 in the first quarter of 2013 compared to $353 for the corresponding quarter in 2012. Dialysis product revenue decreased by 2% to $183 million.

International revenue increased by 3% to $1,169 million (+4% at constant currency). Organic revenue growth was 5%. Dialysis services revenue increased by 3% to $574 million (+5% at constant currency). Dialysis product revenue increased by 3% to $595 million (+3% at constant currency).

Earnings

Operating income (EBIT) for the first quarter of 2013 decreased by 2% to $493 million compared to $503 million in the first quarter of 2012. This resulted in an operating margin of 14.2% for the first quarter of 2013 as compared to 15.5% for the corresponding quarter in 2012.

The operating margin for North America decreased from 16.5% to 16.1%. This development was impacted by higher personnel expenses and two less dialysis days in the first quarter of 2013 as compared to the first quarter of 2012. Average costs per treatment for U.S. services increased to $294 in the first quarter of 2013 as compared to $286 in the first quarter of 2012.

In the International segment, the operating margin decreased from 17.2% to 15.7%. The margin development was negatively influenced by the devaluation of the Venezuelan Bolivar.

Net interest expense for the first quarter of 2013 was $104 million, compared to $99 million in the first quarter of 2012. This development was positively influenced by lower interest rates but offset by lower interest income as a result of the retirement of a loan associated with the acquisition of Liberty Dialysis Holdings, Inc.

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the first quarter of 2013 was $225 million, a decrease of 39% compared to the corresponding number for the first quarter of 2012. Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA decreased by 8% in the first quarter of 2013 if compared to the adjusted net income number of $244 million for the first quarter of 2012 excluding an investment gain of $127 million.

Income tax expense was $129 million for the first quarter of 2013 and translating into an effective tax rate of 33.2%. This compares to income tax expense of $137 million and a tax rate of 25.8% and, excluding the investment gain, an adjusted effective tax rate of 33.9% for the first quarter of 2012.

Earnings per ordinary share (EPS) for the first quarter of 2013 was $0.74, a decrease of 40% compared to the corresponding number for the first quarter of 2012. EPS decreased by 8% in the first quarter of 2013 if compared to an adjusted EPS number of $0.80, excluding the investment gain, for the first quarter of 2012. The weighted average number of shares outstanding for the first quarter of 2013 was approximately 306.7 million shares, compared to 304.2 million shares for the first quarter of 2012. The increase in shares outstanding resulted from stock option exercises in the past twelve months.

Cash flow

In the first quarter of 2013, the company generated $315 million in cash from operations, a decrease of 34% compared to the corresponding figure of last year and representing 9.1% of revenue.

A total of $146 million was spent for capital expenditures, net of disposals. Free cash flow before acquisitions was $169 million (representing 4.9% of revenue) compared to $359 million in the first quarter of 2012. A total of $71 million in cash was spent for acquisitions and investments, net of divestitures. Free cash flow after acquisitions and divestitures was $98 million, compared to minus $1,167 million in the first quarter of 2012.

Please refer to the attachments for a complete overview on the first quarter of 2013.

Patients – Clinics – Treatments

As of March 31, 2013, Fresenius Medical Care treated 261,648 patients worldwide, which represents an increase of 3% compared to the previous year's figure. North America provided dialysis treatments for 167,233 patients, an increase of 3% compared to the corresponding number for 2012. The International segment provided dialysis treatments for 94,415 patients, an increase of 3% over the prior year's figure.

As of March 31, 2013, the company operated a total of 3,180 clinics worldwide, an increase of 2% compared to the corresponding number for 2012. The number of clinics is comprised of 2,090 clinics in North America (+2%) and 1,090 clinics in the International segment (+2%).

During the first quarter of 2013, Fresenius Medical Care delivered approximately 9.7 million dialysis treatments worldwide. This represents an increase of 5% compared to the previous year's figure. North America accounted for 6.1 million treatments, an increase of 7%. The International segment delivered 3.5 million treatments, an increase of 2%.

Employees

As of March 31, 2013, Fresenius Medical Care had 86,855 employees (full-time equivalents) worldwide, compared to 86,153 employees at the end of 2012.

Debt/EBITDA ratio

The ratio of debt to earnings before interest, taxes, depreciation and amortization (EBITDA) decreased from 2.96 at the end of the first quarter of 2012 to 2.78 at the end of the first quarter of 2013. The debt/EBITDA ratio at the end of 2012 was 2.83.

Rating

Standard & Poor's rates the company's corporate credit as ‘BB+', with a ‘positive' outlook. Moody's rates the company's corporate credit as ‘Ba1' with a ‘stable' outlook. Fitch rates the company's corporate credit as ‘BB+' with a ‘stable' outlook.

Share buy-back program and simplification of capital structure

The management board and the supervisory board have approved a share buy-back program with an aggregate value of up to €385 million. The program will be financed from cash flow and existing credit facilities.

The boards also approved a proposal to optimize the organization's capital structure by the mandatory conversion of all preference shares into ordinary shares on a 1:1 basis. The preference shares currently represent approximately 1.3% of the company's total share capital. At its upcoming annual general meeting and in a separate meeting of preference shareholders the company will ask its shareholders to approve this conversion.

Guidance for 2013 confirmed

For the full year 2013, the company confirms its revenue and earnings outlook.

The company expects revenue to grow to more than $14.6 billion in 2013, translating into a growth rate of more than 6%.

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to be between $1.1 billion and $1.2 billion in 2013. This represents an increase of between 5% and 15% if compared to the net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for 2012 excluding an investment gain in the amount of $140 million. As we previously disclosed, the range of our net income guidance considers the U.S. government reversing the effect of sequestration for the calendar year. If this takes place it represents approximately $45 million in net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA. It is possible that the U.S. government may modify all or a portion of this but the likelihood of this diminishes as the year progresses.

For 2013, the company expects to spend around $700 million on capital expenditures and around $300 million on acquisitions. The debt/EBITDA ratio is expected to be equal or below 3.0 by the end of 2013.

Rice Powell, chief executive officer of Fresenius Medical Care, commented: "In a challenging, uncertain environment we delivered solid first quarter results led by the continuous growth in our dialysis services business in North America. Also of note is that we are confident meeting our guidance range for the full year, although we are not completely satisfied with our growth internationally in the first quarter of 2013. Along with the outstanding efforts of our talented people, we will continue to further strengthen our business to deliver sustainable growth and meaningful innovations for reliable high quality products to dialysis patients around the world."

Conference Call

Fresenius Medical Care will hold a conference call to discuss the results of the first quarter of 2013 on Tuesday, April 30, 2013, at 3:30 p.m. CEDT / 9:30 a.m. EDT. The company invites investors to follow the live webcast of the call at the company's website www.fmc-ag.com in the "Investor Relations" section. A replay will be available shortly after the call.

Contact

Head of Corporate Communications
T +49 (0) 6172 608-96008
pr-fre@fresenius.com

Documents

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Q1/2013:

• Sales: €4.9 billion (+11% at actual rates, +12% in constant currency)
• EBIT*: €696 million (+5% at actual rates, +6% in constant currency)
• Net income**: €224 million (+12% at actual rates, +12% in constant currency)

Ulf Mark Schneider, CEO of Fresenius, said: "Fresenius is off to an excellent start in 2013. We improved on last year's outstanding sales and earnings and had the best first quarter in the Company's history. Fresenius Kabi and Fresenius Helios recorded particularly strong growth. Our first-quarter performance puts us on track to meet our goals for the full year 2013 and to exceed €1 billion in Group net income for the first time."

*2013 adjusted for one-time integration costs of Fenwal Holdings, Inc. ("Fenwal") of €7 million
**Net income attributable to shareholders of Fresenius SE & Co. KGaA; 2013 adjusted for one-time integration costs of Fenwal of €5 million after tax; 2012 adjusted for an non-taxable investment gain of €30 million at Fresenius Medical Care

Group outlook 2013 fully confirmed
Based on the Group's performance in the first quarter, Fresenius fully confirms its full-year guidance. For 2013, Fresenius expects sales to increase by 7% to 10% and net income* to increase by 7% to 12%, both in constant currency.

The Group plans to invest around 5% of sales in property, plant and equipment.

The net debt/EBITDA ratio is projected to be at the lower end of the targeted range of 2.5 to 3.0 by the end of 2013.

Based on the Group's performance in the first quarter, Fresenius fully confirms its full-year guidance. For 2013, Fresenius expects sales to increase by 7% to 10% and net income* to increase by 7% to 12%, both in constant currency.The Group plans to invest around 5% of sales in property, plant and equipment.The net debt/EBITDA ratio is projected to be at the lower end of the targeted range of 2.5 to 3.0 by the end of 2013.

*Net income attributable to shareholders of Fresenius SE & Co. KGaA; 2013 adjusted for one-time integration costs of Fenwal (~€50 million pre tax); 2012 adjusted for a non-taxable investment gain and certain one-time costs at Fresenius Medical Care as well as for one-time costs related to the offer to RHÖN-KLINIKUM AG shareholders

Excellent sales growth
Group sales increased by 11% (12% in constant currency) to €4,890 million (Q1/2012: €4,419 million). Organic sales growth was 5%. Acquisitions contributed a further 8%. Divestitures reduced sales growth by 1%.

Sales in the business segments developed as follows:

Group sales increased by 11% (12% in constant currency) to €4,890 million (Q1/2012: €4,419 million). Organic sales growth was 5%. Acquisitions contributed a further 8%. Divestitures reduced sales growth by 1%.Sales in the business segments developed as follows:

Organic sales growth was 6% in North America and 3% in Europe. In Latin America (15%) and Africa (24%) organic sales growth was particularly strong. In Asia-Pacific organic sales growth was 6%.

Continued strong earnings growth
Group EBITDA* grew by 7% (8% in constant currency) to €898 million (Q1/2012: €838 million). Group EBIT* increased by 5% (6% in constant currency) to €696 million (Q1/2012: €661 million). The EBIT margin was 14.2% (Q1/2012: 15.0%).

Group net interest was -€163 million (Q1/2012: -€147 million), including  €14 million one-time costs resulting from the early redemption of the Senior Notes originally due 2016.

The Group tax rate** improved to 29.1% (Q1/2012: 30.4%).

Noncontrolling interest was €154 million (Q1/2012: €158 million), of which 94% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income*** increased by 12% (12% in constant currency) to €224 million (Q1/2012: €200 million). Earnings per share3 increased by 2% to €1.26 (Q1/2012: €1.23).

As of March 31, 2013, Fresenius had 178,271,131 shares outstanding (March 31, 2012: 163,334,670).

Group net income attributable to shareholders of Fresenius SE & Co. KGaA including one-time integration costs for Fenwal was €219 million or €1.23 per share.

*2013 adjusted for one-time integration costs of Fenwal of €7 million

**2013 adjusted for one-time integration costs of Fenwal; 2012 adjusted for a non-taxable investment gain at Fresenius Medical Care

***Net income attributable to shareholders of Fresenius SE & Co. KGaA; 2013 adjusted for one-time integration costs of Fenwal of €5 million after tax; 2012 adjusted for a non-taxable investment gain of €30 million at Fresenius Medical Care

Continued investment in growth
The Fresenius Group spent €179 million on property, plant and equipment (Q1/2012: €151 million). Acquisition spending was €79 million (Q1/2012: €1,927 million).

Continued strong operating cash flow
Operating cash flow was €444 million (Q1/2012: €538 million). The cash flow margin reached 9.1% (Q1/2012: 12.2%). Net capital expenditure increased to €188 million (Q1/2012: €152 million). Free cash flow before acquisitions and dividends was €256 million (Q1/2012: €386 million). Free cash flow after acquisitions and dividends increased to €229 million (Q1/2012: -€1,096 million).

Solid balance sheet structure
The Group's total assets increased by 2% (flat in constant currency) to €31,311 million (Dec. 31, 2012: €30,664 million). Current assets grew by 2% to €8,267 million (Dec. 31, 2012: €8,113 million). Non-current assets increased by 2% to €23,044 million (Dec. 31, 2012: €22,551 million).

Total shareholders' equity increased by 4% to €13,298 million (Dec. 31, 2012: €12,758 million). The equity ratio increased to 42.5% (Dec. 31, 2012: 41.6%).

Group debt was €11,024 million (Dec. 31, 2012: €11,028 million). Net debt was €10,174 million (Dec. 31, 2012: €10,143 million). As of March 31, 2013, the net debt/EBITDA ratio was 2.57* (Dec. 31, 2012: 2.56**).

*Pro forma including Fenwal; adjusted for one-time costs of €6 million (non-financing expenses) related to the offer to RHÖN-KLINIKUM AG shareholders; adjusted for one-time costs of €86 million at Fresenius Medical Care and one-time integration costs of Fenwal of €7 million

**Pro forma including Damp Group, Liberty Dialysis Holdings, Inc. and Fenwal, adjusted for one-time costs of €6 million (non-financing expenses) related to the offer to RHÖN-KLINIKUM AG shareholders, and one-time costs of €86 million at Fresenius Medical Care

Number of employees increases
As of March 31, 2013, the Fresenius Group increased the number of its employees by 1% to 171,764 (Dec. 31, 2012: 169,324), mainly due to acquisitions.

Fresenius Biotech
Fresenius Biotech develops innovative therapies with trifunctional antibodies for the treatment of cancer. In the field of polyclonal antibodies, Fresenius Biotech has successfully marketed ATG-Fresenius S for many years. ATG-Fresenius S is an immunosuppressive agent used to prevent and treat graft rejection following organ transplantation.

Fresenius Biotech's sales increased by 2% to €8.3 million (Q1/2012: €8.1 million). Removab sales were €0.7 million (Q1/2012: €1.1 million). ATG Fresenius S sales increased by 9% to €7.6 million (Q1/2012: €7.0 million). Fresenius Biotech's EBIT was -€3 million
(Q1/2012: -€6 million).

In December 2012, Fresenius announced the decision to discontinue its Fresenius Biotech subsidiary. The Company is in talks with several parties about a sale of Fresenius Biotech, while simultaneously assessing the equally viable option of continuing the immunosuppressive drug ATG-Fresenius S within the Fresenius Group. ATG-Fresenius S has been well established in the hospital market for decades, and is consistently profitable. Fresenius will divest the trifunctional antibody Removab (catumaxomab) business. Withdrawing from Removab will have a positive effect on Group earnings starting in 2013.

Business Segments

Fresenius Medical Care
Fresenius Medical Care is the world's leading provider of services and products for patients with chronic kidney failure. As of March 31, 2013, Fresenius Medical Care was treating 261,648 patients in 3,180 dialysis clinics.

• Strong growth in dialysis services
• One-time effects drive slight EBIT decrease
• 2013 outlook confirmed

Sales increased by 7% (7% in constant currency) to US$3,464 million (Q1/2012: US$3,249 million). Organic sales growth was 4%. Acquisitions contributed a further 4%. Divestitures reduced sales by 1%.

Sales in dialysis services increased by 8% (9% in constant currency) to US$2,678 million (Q1/2012: US$2,478 million). Dialysis product sales grew by 2% (2% in constant currency) to US$786 million (Q1/2012: US$771 million).

In North America sales grew 9% to US$2,287 million (Q1/2012: US$2,105 million). Dialysis services sales grew by 10% to US$2,104 million (Q1/2012: US$1,918 million), although the quarter had two dialysis days less. Average revenue per treatment for US services increased to US$359 (Q1/2012: US$353). Dialysis product sales were US$183 million (Q1 2012: US$187 million).

Sales outside North America ("International" segment) grew by 3% (4% in constant currency) to US$1,169 million (Q1/2012: US$1,136 million). Sales in dialysis services increased by 3% to US$574 million (Q1/2012: US$560 million). Dialysis product sales grew by 3% to US$595 million (Q1/2012: US$576 million).

EBIT decreased by 2% to US$493 million (Q1/2012: US$503 million). The EBIT margin was 14.2% (Q1/2012: 15.5%). The operating margin for North America decreased from 16.5% to 16.1%, impacted by higher personnel expenses and two dialysis days less as compared to the first quarter 2012. The operating margin in the International segment decreased from 17.2% to 15.7%, mainly due to special charges related to the devaluation of the Venezuelan Bolivar.

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA decreased by 8% to US$225 million (Q1/2012*: US$244 million).

The operating cash flow decreased by 34% to US$315 million (Q1/2012 US$481 million. The cash flow margin was 9.1% (Q1/2012: 14.8%).

The company expects revenue to grow to more than US$14.6 billion in 2013. Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to be between US$1.1 billion and US$1.2 billion in 2013. As previously disclosed, the range of the net income guidance considers the U.S. government reversing the effect of sequestration for the calendar year. If this takes place it represents approximately US$45 million in net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA. It is possible that the U.S. government may modify all or a portion of this but the likelihood of this diminishes as the year progresses.

For further information, please see Fresenius Medical Care's Press Release at www.fmc-ag.com.

*Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA; Q1/2012 adjusted for a non-taxable investment gain of US$127 million related to the acquisition of Liberty Holdings, Inc.

Fresenius Kabi
Fresenius Kabi offers infusion therapies, intravenously administered generic drugs and clinical nutrition for seriously and chronically ill patients in the hospital and outpatient environments. The company is also a leading supplier of medical devices and transfusion technology products.

• Strong organic sales growth of 7%
• EBIT margin of 18.8% (incl. Fenwal) at upper end of guidance
• 2013 outlook fully confirmed

Sales increased by 15% (17% in constant currency) to €1,260 million (Q1/2012: €1,092 million). Organic sales growth was 7%, well above the full year guidance of 3% to 5%. Acquisitions contributed 11%, while divestitures reduced sales by 1%.

Sales in Europe grew by 6% (organic growth: 2%) to €517 million (Q1/2012: €487 million). Sales in North America increased by 37% to €401 million (Q1/2012: €292 million), primarily driven by the first-time consolidation of Fenwal. Strong organic growth of 14% was mainly supported by product launches and competitors facing continued supply constraints. In Asia-Pacific sales increased by 12% (organic growth: 9%) to €223 million (Q1/2012: €199 million). Sales in Latin America/Africa increased by 4% (organic growth: 9%) to €119 million (Q1/2012: €114 million). Growth in the first quarter 2013 compares to an exceptionally strong Q1/2012 base, posting 8% organic sales growth in Europe, 20% in Asia-Pacific and 15% in Latin America/Africa.

EBIT grew by 10% to €237 million (Q1/2012: €215 million), driven in particular by excellent earnings growth in North America. The EBIT margin of 18.8% was at the upper end of full-year guidance. Excluding Fenwal, the EBIT margin was 20.0% (Q1/2012: 19.7%).

The first quarter 2013 includes provisions built for expected one-time charges to remediate manufacturing issues following FDA audits at the Grand Island, USA, and Kalyani, India, facilities. These slightly exceed the gain resulting from the sale of the respiratory homecare business in France.

Net income* increased by 21% to €119 million (Q1/2012: €98 million).

Fresenius Kabi's operating cash flow increased by 42% to €132 million (Q1/2012: €93 million). The cash flow margin increased to 10.5% (Q1/2012: 8.5%). Cash flow before acquisitions and dividends improved to €76 million (Q1/2012: €57 million).

The integration of Fenwal progressed as planned with related first quarter costs of €7 million pre-tax.

Fresenius Kabi fully confirms its outlook for 2013 and projects sales growth of 12% to 14% in constant currency. Organic sales growth is expected in the range of 3% to 5%.

The company projects an EBIT margin of 19% to 20% excluding Fenwal and of 18% to 19% including Fenwal. EBIT in constant currency is expected to exceed 2012 EBIT. The guidance includes expected one-time charges to remediate manufacturing issues following FDA audits at the Grand Island, USA, and Kalyani, India, facilities. It also includes a gain related to the sale of the respiratory homecare business in France.

Fresenius Kabi guidance adjusted for one-time integration costs of Fenwal (~€50 million pre tax); also see Group guidance

*Net income attributable to shareholders of Fresenius Kabi AG

 
Fresenius Helios
Fresenius Helios is one of the largest private hospital operators in Germany. HELIOS owns 74 hospitals, thereof 51 acute care clinics including six maximum care hospitals in Berlin-Buch, Duisburg, Erfurt, Krefeld, Schwerin and Wuppertal and 23 post-acute care clinics. HELIOS treats more than 2.9 million patients per year, thereof more than 780,000 inpatients, and operates more than 23,000 beds.
 

• Strong organic sales growth of 5% at the upper end of guidance
• EBIT margin increase by 70 basis points to 10.3%
• 2013 outlook fully confirmed

Sales increased by 18% to €841 million (Q1/2012: €710 million). Organic sales growth was 5%, acquisitions contributed 14%. Divestitures reduced sales growth by 1%.

EBIT grew by 28% to €87 million (Q1/2012: €68 million). The EBIT margin improved by 70 basis points to 10.3% (Q1/2012: 9.6%).

Net income* increased by 37% to €56 million (Q1/2012: €41 million).

Sales of the established hospitals grew by 5% to €739 million. EBIT improved by 20% to €83 million. The EBIT margin increased to 11.2% (Q1/2012: 9.8%). Sales of the acquired hospitals (consolidation <1 year) were €102 million, EBIT was €4 million.

In April 2013, Fresenius Helios completed the acquisition of the hospital in Wipperfuerth, North-Rhine Westphalia, announced in November 2012. The hospital was consolidated as of January 1, 2013. 2011 sales were €20 million.

Fresenius Helios fully confirms its outlook for 2013. The company projects organic sales growth of 3% to 5% and EBIT in the range of €360 million to €380 million.

*Adjusted for post-acute care clinic Zihlschlacht transferred to Fresenius Vamed
**Net income attributable to shareholders of HELIOS Kliniken GmbH

Fresenius Vamed
Fresenius Vamed offers engineering and services for hospitals and other health care facilities.

• Excellent organic sales growth of 10%
• EBIT in line with expectations
• 2013 outlook fully confirmed

Sales increased by 23% to €184 million (Q1/2012: €149 million). Organic sales growth was 10%, acquisitions contributed a further 13%. Sales in the project business increased by 6% to €82 million (Q1/2012: €77 million). Sales in the service business grew by 42% to
€102 million (Q1/2012: €72 million).

EBIT was €5 million (Q1/2012: €5 million). The EBIT margin reached 2.7% (Q1/2012: 3.4%).

Net income* was €3 million (Q1/2012: €4 million).

Order intake was €93 million (Q1/2012: €104 million), including a €48 million turnkey project for a diagnostic center in Russia. As of March 31, 2013, Fresenius Vamed's order backlog was €998 million (Dec. 31, 2012: €987 million).

Fresenius Vamed fully confirms its outlook for 2013 and expects to achieve sales growth of 8% to 12%. EBIT growth is projected in the range of 5% to 10%.

*Adjusted for post-acute care clinic Zihlschlacht
**Net income attributable to shareholders of Vamed AG

Analyst-/Investor Conference Call
As part of the publication of the results for the first quarter of 2013, a conference call will be held on April 30, 2013 at 2 p.m. CEST (8 a.m. EDT). All investors are cordially invited to follow the conference call in a live broadcast via the Internet at www.fresenius.com, see Investor Relations, Presentations. Following the call, a replay of the conference call will be available on our website.

Contact

Head of Corporate Communications
T +49 (0) 6172 608-96008
pr-fre@fresenius.com

Documents

Text as PDF document (PDF, 39 KB)

Fresenius Medical Care, the world's largest provider of dialysis products and services, will simplify the company's capital structure. At the annual general meeting in Frankfurt today, a large shareholder majority of 99.97% approved the mandatory conversion of preference shares into ordinary shares on a 1:1 basis, as recommended by the Management Board and the Supervisory Board. A separate meeting of preference shareholders also approved the proposal, with a 99.99% majority. Preference shares currently represent about 1.3% of the company's total share capital.

With a large majority of 99.86%, shareholders approved Fresenius Medical Care's 16th consecutive dividend increase. The dividend will be raised to €0.75 from €0.69 per ordinary share, and to €0.77 from €0.71 per preference share.

Rice Powell, chief executive officer of Fresenius Medical Care, confirmed the full-year 2013 outlook. The company expects revenue to grow by more than 6% to over $14.6 billion this year, with net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA expected to be between $1.1 billion and $1.2 billion, an increase of between 5% and 15% from 2012*.

"Fresenius Medical Care has retained its global leadership position, and we continue to shape the future of the dialysis industry in a market that is expected to grow at 4% per annum in constant currency to 100 billion U.S. in 2020," Rice Powell told shareholders. "Our focus is always – and will always be - on superior quality in both products and services. We have the ability to grow through the expansion of our clinic network and to grow by expanding our product portfolio and adding new services. We think our business model of vertical integration will be advantageous for the future developments in this industry."

The annual general meeting was the first under the leadership of Rice Powell. He succeeded Dr. Ben Lipps on January 1, 2013.

A shareholder majority of over 99% approved the actions of both the Management and Supervisory Boards in 2012.

At the annual general meeting, 73.71% of the subscribed capital was represented. Only ordinary shareholders were entitled to vote.

*Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA – 2012 adjusted for a non-taxable investment gain of US$140 million

Contact

Head of Corporate Communications
T +49 (0) 6172 608-96008
pr-fre@fresenius.com

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After setting new records for sales and earnings last year, Fresenius is expecting further increases in fiscal 2013. At the Annual General Meeting in Frankfurt today, Ulf Mark Schneider, CEO of Fresenius, confirmed the global health care group's goal of exceeding €20 billion in sales this year. Additionally, net income is forecast to exceed €1 billion – a target that had originally been set for 2014.

*Net income attributable to shareholders of Fresenius SE & Co. KGaA; 2013 adjusted for one-time integration costs of Fenwal, Inc.

Fresenius SE & Co. KGaA shareholders voted with a majority of 99.99% at the Annual General Meeting to approve the 20th consecutive dividend increase proposed by the general partner and the Supervisory Board. Shareholders will receive €1.10 per common share (2011: €0.95), a substantial 16% increase that reflects the new dividend policy of aligning growth in the dividend with the growth in earnings per share before special items. The company is hereby maintaining a payout ratio in the 20 to 25% range

The shareholders, with a majority of 91%, approved a new Authorized Capital in the amount of €40.32 million. The previous Authorized Capital in the amount of €26.52 million was cancelled; the company had utilized part of the original authorization of €40.32 million, approved in 2011, in a capital increase in May 2012. With a majority of 99%, shareholders approved a new stock-option program and a corresponding Conditional Capital.

Shareholder majorities of 99.91% and 98.70% approved the actions of the Management and Supervisory Boards, respectively, in 2012.

At the Annual General Meeting, 73.63% of the subscribed capital was represented.

Contact

Head of Corporate Communications
T +49 (0) 6172 608-96008
pr-fre@fresenius.com

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The Catalonian Online Hemodiafiltration Survival Study (ESHOL) published in February 2013 confirms Fresenius Medical Care's conviction that every patient should be given the chance to benefit from hemodiafiltration (HDF) therapy with high volumes of substitution fluid (HighVolumeHDF). The primary outcome of the study was that HighVolumeHDF therapy significantly improves patient survival compared with conventional dialysis treatment. At this year's ERA-EDTA Congress, held in Istanbul, Turkey from May 18 to 21, HighVolumeHDF was the main focus of Fresenius Medical Care's activities.

Results of the Catalonian HDF study, recently published in the Journal of the American Society of Nephrology, were presented at Fresenius Medical Care's Scientific Lunch Symposium by the lead study investigator, Dr. Francisco Maduell of Barcelona, Spain. With 906 patients from 27 centers in Spain's Catalonia region, this is the largest study to date on HDF. The main finding of this randomized controlled trial is a 30% reduced risk of all-cause mortality for patients treated with HDF and large volumes of substitution (HighVolumeHDF) compared with patients treated with conventional hemodialysis. The large number of participants – more than 1,000 – at the symposium underlined the nephrology community's keen interest in the symposium's subject, "Emerging Concept: High Volume Matters in Hemodiafiltration (HighVolumeHDF)."

Professor Bernard Canaud, Chairman of Fresenius Medical Care's EMEALA (Europe, Middle East, Africa, Latin America) Medical Board, summarized the symposium, stating that "HighVolumeHDF significantly improves patient survival and quality of life versus standard hemodialysis and should therefore be the standard in cardioprotective hemodialysis for all patients."

These latest findings confirm the longstanding conviction of Fresenius Medical Care that HighVolumeHDF is the most efficient and cardioprotective therapy for dialysis patients with end-stage renal failure. That is why Fresenius Medical Care has been developing products for cardioprotective hemodialysis for years, leading to the CorDiax product line and the Online Purification Cascade for best water quality. This comprehensive approach, presented at the booth and the therapy forum, perfectly supports the application of HighVolumeHDF in daily clinical practice. The 5008 CorDiax and 5008S CorDiax therapy systems include a new feature for achieving high substitution volumes, the AutoSub plus. This is an intelligent automatic regulation system to maximize the substitution volume for the individual patient while avoiding the risk of filter blockage. The 5008 CorDiax and 5008S CorDiax therapy systems therefore facilitate HighVolumeHDF in a very simple and safe manner, making HighVolumeHDF therapy feasible for all patients.

Fresenius Medical Care's strong commitment to research and innovation was also evidenced by the 44 abstracts of original scientific research accepted for presentation at the congress. These contributions, in the form of scientific posters and oral presentations, spanned multiple research categories, from stem cell research through all stages of chronic and acute kidney disease. The categories with the most Fresenius Medical Care research contributions were:

• Extracorporeal dialysis – techniques and adequacy (9 posters & 1 oral presentation)
• Epidemiology (7 posters)
• CKD-Mineral & Bone Disorder (3 posters & 3 oral presentations)

Three of the abstracts were considered among the best 10 contributions received, and were given special recognition by the ERA-EDTA.

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Fresenius has sold Fresenius Biotech to the Fuhrer family, owners of Neopharm, Israel's second-largest pharmaceutical company. The transaction was closed June 28 and includes both products Removab and ATG-Fresenius S.

In December 2012, Fresenius had announced to focus on its four established business segments Fresenius Medical Care, Fresenius Kabi, Fresenius Helios and Fresenius Vamed, which offer significant growth opportunities.

Ulf Mark Schneider, CEO of Fresenius, said: "The divestiture underlines our strong commitment to focused growth in our four core business segments. We are delighted that our biotechnology business will be in the capable hands of Neopharm, a company with entrepreneurial vision and an outstanding track record in the healthcare field."

David Fuhrer, Chairman and CEO of Neopharm, said: "The acquisition represents a cornerstone in our strategic objective to transform Neopharm Group into a multinational fully-integrated bio-pharmaceutical company. Our objective is to establish Fresenius Biotech as an independent, rapidly-growing, innovative global player which is committed to bring hope to patients suffering from rare, life-threatening diseases."

The parties agreed not to disclose financial details of the transaction. The sale of Fresenius Biotech will have a positive effect on Group earnings starting July 2013.

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Fresenius Kabi received a Warning Letter, dated July 1, from the U.S. Food and Drug Administration (FDA) related to an inspection of its oncolytic API plant in Kalyani, India in January 2013. As a precautionary measure, production at the plant had been put on hold in January 2013. Fresenius previously informed about this inspection in February 2013.

The Warning Letter observations are related to GMP non-conformities regarding manufacturing, documentation practices and data integrity. Many of the data integrity items cited in the Warning Letter were self-identified by Fresenius Kabi post-inspection and shared with the FDA.

The company has made significant progress in remedying the issues cited in the Warning Letter. Based on a detailed remediation action plan submitted to the FDA, Fresenius Kabi has begun the process of restarting manufacture at the facility.

The company takes this matter very seriously and intends to comprehensively respond in a timely manner to the Warning Letter. Fresenius Kabi fully confirms its 2013 guidance which includes expected one-time charges to remediate the issues.

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Second Quarter 2013 Key Figures:

Net revenue $3,613 million  +5%

Operating income (EBIT) $544 million  -8%

Adjusted operating income (EBIT) $555 million  -2%

Net income¹ $263 million  -9%

Adjusted net income¹ $272 million  +2%

Earnings per ordinary share $0.86  -10%

Adjusted earnings per ordinary share $0.89  +2%

First Half 2013 Key Figures:

Net revenue $7,076 million  +6%

Operating income (EBIT) $1,038 million  -5%

Adjusted operating income (EBIT) $1,049 million  -3%

Net income¹ $488 million  -26%

Adjusted net income¹ $498 million  -3%

Earnings per ordinary share $1.59  -27%

Adjusted earnings per ordinary share $1.62  -4%

1 attributable to shareholders of Fresenius Medical Care AG & Co. KGaA

Fresenius Medical Care AG & Co. KGaA (the "company" or "Fresenius Medical Care"; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, today announced its results for the second quarter and first half of 2013.

Second Quarter 2013

Revenue

Net revenue for the second quarter of 2013 increased by 5% to $3,613 million (+6% at constant currency) compared to the second quarter of 2012. Organic revenue growth worldwide was 5%. Dialysis services revenue grew by 5% to $2,743 million (+6% at constant currency) and dialysis product revenue increased by 6% to $870 million (+5% at constant currency).

North America revenue for the second quarter of 2013 increased by 6% to $2,375 million. Organic revenue growth was 5%. Dialysis services revenue grew by 6% to $2,157 million with a same store treatment growth of 4%. Dialysis product revenue increased by 6% to $218 million.

International revenue increased by 5% to $1,228 million (+6% at constant currency). Organic revenue growth was 5%. Dialysis services revenue increased by 4% to $586 million (+7% at constant currency). Dialysis product revenue increased by 5% to $642 million (+5% at constant currency).

Earnings

Operating income (EBIT) for the second quarter of 2013 decreased by 8% to $544 million compared to $589 million in the second quarter of 2012. The operating income for North America for the second quarter of 2013 decreased by 9% to $394 million compared to $431 million in the second quarter of 2012. In the International segment, the operating income for the second quarter of 2013 increased by 1% to $209 million compared to $207 million in the second quarter of 2012.
 

Adjusted for special items related to the acquisition of Liberty Dialysis Holdings Inc. and the impact from the budget cuts in the U.S. (sequestration) that were effectively introduced in April 2013, the operating income for the second quarter of 2013 decreased by 2% to $555 million compared to $568 million in the second quarter of 2012.

Net interest expense for the second quarter of 2013 was $103 million, compared to $104 million in the second quarter of 2012.

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the second quarter of 2013 was $263 million, a decrease of 9% compared to the corresponding number of $289 million for the second quarter of 2012. Adjusted for the net of tax effects of the special items mentioned above, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the second quarter of 2013 increased by 2% to $272 million compared to $266 million for the second quarter of 2012.

Income tax expense was $144 million for the second quarter of 2013 which translates into an effective tax rate of 32.6%. This compares to income tax expense of $172 million and a tax rate of 34.6% for the second quarter of 2012. Adjusted for the special items mentioned above, the tax rate for the second quarter of 2013 was 32.1% as compared to 34.4% for the second quarter of 2012.

Earnings per ordinary share (EPS) for the second quarter of 2013 was $0.86, a decrease of 10% compared to the corresponding number for the second quarter of 2012. Adjusted for the special items mentioned above, EPS for the second quarter of 2013 increased by 2% to $0.89 compared to $0.88 for the second quarter of 2012. The weighted average number of shares outstanding for the second quarter of 2013 was approximately 306.3 million shares, compared to 304.4 million shares for the second quarter of 2012. The increase in shares outstanding mainly resulted from stock option exercises in the past twelve months, partially offset by the effect of the share buy-back program.

Cash flow
 

In the second quarter of 2013, the company generated $525 million in cash from operations, an increase of 16% compared to the corresponding figure of last year and representing 14.5% of revenue.
 

A total of $173 million was spent for capital expenditures, net of disposals. Free cash flow before acquisitions was $352 million (representing 9.8% of revenue) compared to $300 million in the second quarter of 2012.
 

A total of $13 million in cash was spent for acquisitions and investments, net of divestitures. Free cash flow after acquisitions and divestitures was $339 million, compared to $306 million in the second quarter of 2012.

First Half 2013:

Revenue and Earnings

Net revenue for the first half of 2013 increased by 6% to $7,076 million (+6% at constant currencies) compared to the first half of 2012. Organic revenue growth was 5% in the first half of 2013.

Operating income (EBIT) for the first half of 2013 decreased by 5% to $1,038 million compared to $1,092 million in the first half of 2012. Adjusted for special items related to the acquisition of Liberty Dialysis Holdings Inc. and the impact from sequestration the operating income for the first half of 2013 decreased by 3% to $1,049 million compared to $1,078 million for the first half of 2012.

Net interest expense for the first half of 2013 was $207 million compared to $203 million in the same period of 2012.
 

For the first half of 2013, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA was $488 million, down by 26% from the corresponding number of $660 million for the first half of 2012. Adjusted for the net of tax effects of the special items mentioned above, net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA for the first half of 2013 decreased by 3% to $498 million compared to $514 million for the first half of 2012.

Income tax expense for the first half of 2013 was $273 million which translates into an effective tax rate of 32.8%. This compares to income tax expense of $309 million and a tax rate of 30.1% for the first half of 2012. Adjusted for the special items mentioned above, the tax rate for the first half of 2013 was 32.6% as compared to 33.8% for the first half of 2012.
 

In the first half of 2013, earnings per ordinary share decreased by 27% to $1.59 compared to $2.17 for the first half of 2012. Adjusted for the special items mentioned above, EPS for the first half of 2013 decreased by 4% to $1.62 compared to $1.69 for the first half of 2012. The weighted average number of shares outstanding during the first half of 2013 was approximately 306.5 million.

Cash Flow

Cash from operations during the first half of 2013 was $841 million compared to $932 million for the same period in 2012, representing 11.9% of revenue.
 

A total of $319 million in cash was spent for capital expenditures, net of disposals. Free cash flow before acquisitions for the first half of 2013 was $522 million compared to $658 million in the same period in 2012. A total of $84 million in cash was spent for acquisitions, net of divestitures. Free cash flow after acquisitions and divestitures was $438 million compared to minus $862 million in the first half of last year.

Please refer to the attachments for a complete overview of the results for the second quarter and first half of 2013.

Patients – Clinics – Treatments
 

As of June 30, 2013, Fresenius Medical Care treated 264,290 patients worldwide, which represents an increase of 3% compared to the previous year's figure. North America provided dialysis treatments for 168,160 patients, an increase of 3% compared to the corresponding number for 2012. The International segment provided dialysis treatments for 96,130 patients, an increase of 4% over the prior year's figure.
 

As of June 30, 2013, the company operated a total of 3,212 clinics worldwide, an increase of 3% compared to the corresponding number for 2012. The number of clinics is comprised of 2,104 clinics in North America (+3%) and 1,108 clinics in the International segment (+3%).
 

During the first half of 2013, Fresenius Medical Care delivered approximately 19.7 million dialysis treatments worldwide. This represents an increase of 5% compared to the previous year's figure. North America accounted for 12.5 million treatments, an increase of 5%. The International segment delivered 7.2 million treatments, an increase of 3%.

Employees
 

As of June 30, 2013, Fresenius Medical Care had 87,944 employees (full-time equivalents) worldwide, compared to 86,153 employees at the end of 2012.

Debt/EBITDA ratio
 

The ratio of debt to earnings before interest, taxes, depreciation and amortization (EBITDA) decreased from 2.92 at the end of the second quarter of 2012 to 2.91 at the end of the second quarter of 2013.

Rating
 

Standard & Poor's rates the company's corporate credit as ‘BB+', with a ‘positive' outlook. Moody's rates the company's corporate credit as ‘Ba1' with a ‘stable' outlook. During the second quarter, Fitch has raised the outlook from ‘stable' to ‘positive'. Fitch continues to rate the company's corporate credit as ‘BB+'.

Share buy-back program
 

Fresenius Medical Care has started the share buy-back program on May 20, 2013. The company intends to repurchase ordinary shares with an aggregate value of up to €385 million (approximately $500 million). The program is expected to run into the third quarter of 2013. As of June 30, 2013, around 3.58 million shares were repurchased in the amount of approximately €190 million (~$249 million).

Conversion of preference shares
 

At the annual general meeting and in a separate meeting of preference shareholders the shareholders approved the mandatory conversion of all preference shares into ordinary shares on a 1:1 basis. This conversion was finalized on June 28, 2013.

Guidance for 2013 confirmed
 

The company expects revenue to grow to more than $14.6 billion in 2013, translating into a growth rate of more than 6%.
 

In April 2013 budget cuts in the U.S. (sequestration) were effectively introduced. We do not assume that these measurements will be revised this year. Therefore the net income guidance range has been confirmed and has been substantiated for the potential impact from sequestration on our business performance. Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to be between $1.1 billion and $1.15 billion in 2013.
 

For 2013, the company expects to spend around $700 million on capital expenditures and around $500 million on acquisitions. The debt/EBITDA ratio is expected to be equal or below 3.0 by the end of 2013.
 

Rice Powell, chief executive officer of Fresenius Medical Care, commented: "Our second quarter results show a mixed picture. On the one hand, we have seen an accelerated growth of our business while on the other hand we were faced with the general budget cuts in the U.S. which affected our operating income performance. Nevertheless, we were able to show an earnings increase in the second quarter on an adjusted basis. To stay ahead of our competition given the challenging environment, we are rigorously focusing on our company-wide Global Efficiency Program that we initiated at the beginning of the year."

Conference Call
 

Fresenius Medical Care will hold a conference call to discuss the results of the second quarter and first half of 2013 on Tuesday, July 30, 2013, at 3.30 p.m. CEDT / 9.30 a.m. EDT. The company invites investors to follow the live webcast of the call at the company's website www.fmc-ag.com in the "Investor Relations" section. A replay will be available shortly after the call.

Contact

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T +49 (0) 6172 608-96008
pr-fre@fresenius.com

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H1/2013:

• Sales*: €10.0 billion (+8% at actual rates, +9% in constant currency)
• EBIT: €1.4 billion (+1% at actual rates, +2% in constant currency)
• Net income**: €482 million (+11% at actual rates, +12% in constant currency)

Ulf Mark Schneider, CEO of Fresenius, said: "The first-half results underline that our broad geographic presence and well-diversified business contribute to the company's success in a challenging environment. We are expanding our footprint in fast-growing emerging markets and work on promising growth initiatives. We remain highly confident of our company's growth prospects and raise 2013 Group earnings guidance."

2013 Group earnings guidance raised
Based on the Group's positive growth prospects for the second half of 2013, Fresenius raises its full-year earnings guidance. The company now expects net income** to increase by 11% to 14% in constant currency. Previously, Fresenius expected net income growth of 7% to 12% in constant currency. The company fully confirms its sales guidance. Sales are expected to increase by 7% to 10% in constant currency.

The Group plans to invest around 5% of sales in property, plant and equipment.

The net debt/EBITDA ratio is projected to be at the lower end of the targeted range of 2.5 to 3.0 by the end of 2013.

Sales growth of 9% in constant currency
Group sales increased by 8% (9% in constant currency) to €9,987 million (H1/2012: €9,236 million). Organic sales growth was 5%. Acquisitions contributed 5%. Divestitures reduced sales growth by 1%. Sales in the business segments developed as follows:

Organic sales growth was 5% in North America and 2% in Europe. In Latin America (13%) and Africa (30%) organic sales growth was particularly strong. In Asia-Pacific organic sales growth was 7%.

Group EBITDA* grew by 3% (4% in constant currency) to €1,860 million (H1/2012: €1,806 million). Group EBIT* increased by 1% (2% in constant currency) to €1,448 million (H1/2012: €1,440 million). The EBIT margin of 14.5% (H1/2012: 15.6%) was impacted by a margin reduction at Fresenius Medical Care as well as the first-time consolidation of Fenwal. However, Q2/2013 margin of 14.8% already showed a distinct improvement over Q1/2013 (14.2%).

Group net interest remained at last year's level of -€313 million, including €14 million one-time costs resulting from the early redemption of the Senior Notes originally due 2016.

The Group tax rate* improved to 28.5% (H1/2012: 30.8%).

Noncontrolling interest was €330 million (H1/2012: €346 million), of which 94% was attributable to the noncontrolling interest in Fresenius Medical Care.

Group net income** increased by 11% (12% in constant currency) to €482 million (H1/2012: €434 million). Earnings per share** increased by 5% to €2.70 (H1/2012: €2.58).

In H1/2013, the weighted average number of shares outstanding was 178,306,694 (H1/2012: 167,986,059).

Group net income attributable to shareholders of Fresenius SE & Co. KGaA including one-time integration costs for Fenwal was €462 million or €2.59 per share.

Continued investment in growth
The Fresenius Group spent €425 million on property, plant and equipment (H1/2012: €388 million). Acquisition spending was €150 million (H1/2012: €2,097 million).

Cash flow development
Operating cash flow was €947 million (H1/2012: €1,136 million). The decrease relates primarily to a one-time payment by Fresenius Medical Care regarding the amendment of the supply agreement for the iron product Venofer in North America. In H1/2012, the operating cash flow was positively influenced by extraordinary payments on trade accounts receivable. The cash flow margin reached 9.5% (H1/2012: 12.3%). Net capital expenditure increased to €416 million (H1/2012: €358 million). Free cash flow before acquisitions and dividends was €531 million (H1/2012: €778 million). Free cash flow after acquisitions and dividends increased to €92 million (H1/2012: -€1,154 million).
 
Solid balance sheet structure
The Group's total assets increased by 1% (1% in constant currency) to €30,973 million (Dec. 31, 2012: €30,664 million). Current assets grew by 2% to €8,257 million (Dec. 31, 2012: €8,113 million). Non-current assets increased by 1% to €22,716 million (Dec. 31, 2012: €22,551 million).

Total shareholders' equity increased by 2% to €12,955 million (Dec. 31, 2012: €12,758 million). The equity ratio was 41.8% (Dec. 31, 2012: 41.6%).

Group debt was €11,204 million (Dec. 31, 2012: €11,028 million). Net debt was €10,362 million (Dec. 31, 2012: €10,143 million). As of June 30, 2013, the net debt/EBITDA ratio was 2.63*** (Dec. 31, 2012: 2.56****).

Number of employees increases
As of June 30, 2013, the Fresenius Group increased the number of its employees by 2% to 173,325 (Dec. 31, 2012: 169,324).

Fresenius Biotech
Fresenius Biotech's sales were €16.6 million (H1/2012: €16.6 million). The EBIT was
-€6 million (H1/2012: -€11 million).

With effect of 28 June 2013, Fresenius sold Fresenius Biotech to the Fuhrer family, owners of Neopharm, Israel's second-largest pharmaceutical company. The transaction resulted in a negligible book gain and will have a positive effect on Group earnings, as the projected H2/2013 EBIT loss of ~€10 million will now not materialize.

*2013 excluding one-time integration costs of Fenwal Holdings, Inc. ("Fenwal"). 2012 before one-time items.
**Net income attributable to shareholders of Fresenius SE & Co. KGaA; 2013 excluding one-time integration costs of Fenwal. 2012 before one-time items.
***Pro forma including Fenwal; before one-time costs (non-financing expenses) related to the takeover offer to RHÖN-KLINIKUM AG shareholders, one-time costs at Fresenius Medical Care and one-time integration costs of Fenwal.
****Pro forma including Damp Group, Liberty Dialysis Holdings, Inc. and Fenwal; before one-time costs (non-financing expenses) related to the takeover offer to RHÖN-KLINIKUM AG shareholders, and one-time costs at Fresenius Medical Care.

Business Segments

Fresenius Medical Care
Fresenius Medical Care is the world's leading provider of services and products for patients with chronic kidney failure. As of June 30, 2013, Fresenius Medical Care was treating 264,290 patients in 3,212 dialysis clinics.

• Strong organic sales growth of 5%
• Excellent operating cash flow margin of 11.9%
• 2013 guidance confirmed

Sales increased by 6% (6% in constant currency) to US$7,076 million (H1/2012: US$6,677 million). Organic sales growth was 5%. Acquisitions contributed a further 3%. Divestitures reduced sales growth by 2%.

Sales in dialysis services increased by 7% (7% in constant currency) to US$5,421 million (H1/2012: US$5,082 million). Dialysis product sales grew by 4% (4% in constant currency) to US$1,655 million (H1/2012: US$1,594 million).

In North America, sales grew 7% to US$4,663 million (H1/2012: US$4,353 million). Dialysis services sales grew by 8% to US$4,261 million (H1/2012: US$3,960 million). Dialysis product sales increased by 2% to US$402 million (H1 2012: US$393 million).

Sales outside North America ("International" segment) grew by 4% (5% in constant currency) to US$2,397 million (H1/2012: US$2,307 million). Sales in dialysis services increased by 3% to US$1,161 million (H1/2012: US$1,122 million). Dialysis product sales grew by 4% to US$1,236 million (H1/2012: US$1,185 million).

EBIT decreased by 5% to US$1,038 million (H1/2012: US$1,092 million).

Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA decreased by 6% to US$488 million (H1/2012*: US$520 million).

The operating cash flow was US$841 million (H1/2012: US$932 million). The reduction relates to an one-time payment regarding the amendment of the agreement for the iron product Venofer in North America (US$100 million). The cash flow margin was 11.9% (H1/2012: 14.0%).

Fresenius Medical Care expects revenue to grow to more than US$14.6 billion in 2013. In April 2013 general budget cuts in the U.S. (sequestration) were effectively introduced. The company does not assume that these will be revised this year. Therefore, the net income guidance range has been confirmed and has been substantiated for the potential impact from sequestration on the company's business performance. Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA is expected to be between US$1.1 billion and US$1.15 billion in 2013.

For further information, please see Fresenius Medical Care's Press Release at www.fmc-ag.com.

*Net income attributable to shareholders of Fresenius Medical Care AG & Co. KGaA; 2012 adjusted for a non-taxable investment gain of US$140 million.

Fresenius Kabi
Fresenius Kabi offers infusion therapies, intravenously administered generic drugs and clinical nutrition for seriously and chronically ill patients in the hospital and outpatient environments. The company is also a leading supplier of medical devices and transfusion technology products.

• Organic sales growth of 4% on the back of strong H1/12
• EBIT margin excluding Fenwal at the upper end of guidance
• 2013 guidance fully confirmed

Sales increased by 13% (14% in constant currency) to €2,519 million (H1/2012: €2,234 million). Organic sales growth was 4%. Acquisitions contributed 11%, while divestitures reduced sales growth by 1%.

Sales in Europe grew by 6% (organic growth: 2%) to €1,030 million (H1/2012: €974 million). Sales in North America increased by 29% to €784 million (H1/2012: €609 million), primarily driven by the consolidation of Fenwal. Organic growth was 6%.

In Asia-Pacific sales increased by 10% (organic growth: 6%) to €456 million (H1/2012: €415 million). Sales in Latin America/Africa increased by 6% (organic growth: 9%) to €249 million (H1/2012: €236 million). Growth in H1/2013 comes over an exceptionally strong H1/2012 base, posting 9% organic sales growth in North America, 6% in Europe, 15% in Asia-Pacific and 14% in Latin America/Africa.

EBIT* grew by 4% to €469 million (H1/2012: €452 million). EBIT includes one-time charges of €24 million to remediate manufacturing issues following FDA audits at the Grand Island, USA, and Kalyani, India, facilities. The EBIT margin was 18.6%. Excluding Fenwal, the EBIT margin of 19.8% (H1/2012: 20.2%) was at the upper end of the full-year guidance.

Net income** increased by 15% to €242 million (H1/2012: €210 million).

Fresenius Kabi's operating cash flow was €238 million (H1/2012: €288 million). Last year's operating cash flow was positively influenced by extraordinary payments on trade accounts receivable. The cash flow margin was 9.4% (H1/2012: 12.9%). Cash flow before acquisitions and dividends was €120 million (H1/2012: €199 million).

The integration of Fenwal progressed as planned with related one-time costs of €27 million pre-tax.

Fresenius Kabi fully confirms its outlook for 2013 and projects sales growth of 12% to 14% in constant currency. Organic sales growth is expected in the range of 3% to 5%.

The company projects an EBIT margin of 19% to 20% excluding Fenwal and of 18% to 19% including Fenwal. EBIT in constant currency is expected to exceed 2012 EBIT. The guidance includes expected one-time charges to remediate manufacturing issues following FDA audits at the Grand Island, USA, and Kalyani, India, facilities. It also includes a gain related to the sale of the respiratory homecare business in France.

Fresenius Kabi guidance excludes Fenwal integration costs (~€50 million pre tax); also see Group guidance.

*Excluding Fenwal integration costs.
**Net income attributable to shareholders of Fresenius Kabi AG.

 
Fresenius Helios
Fresenius Helios is one of the largest private hospital operators in Germany. HELIOS owns 74 hospitals, thereof 51 acute care clinics including six maximum care hospitals in Berlin-Buch, Duisburg, Erfurt, Krefeld, Schwerin and Wuppertal and 23 post-acute care clinics. HELIOS treats more than 2.9 million patients per year, thereof more than 780,000 inpatients, and operates more than 23,000 beds.

• Strong organic sales growth of 5%
• EBIT margin up 80 basis points to 10.6%
• 2013 earnings guidance raised – EBIT between €370 million and €395 million

Sales increased by 11% to €1,695 million (H1/2012: €1,525 million). Organic sales growth was 5%, acquisitions contributed 7%. Divestitures reduced sales growth by 1%.

EBIT grew by 19% to €179 million (H1/2012: €150 million). The EBIT margin increased to 10.6% (H1/2012: 9.8%).

Net income** increased by 31% to €119 million (H1/2012: €91 million).

Sales of the established hospitals grew by 5% to €1,588 million. EBIT improved by 15% to €175 million. The EBIT margin increased to 11.0% (H1/2012: 10.0%). Sales of the acquired hospitals (consolidation <1 year) were €107 million, EBIT was €4 million.

Fresenius Helios raises its 2013 full-year guidance to reflect the additional funding for German hospitals that will have a positive effect starting in August, 2013. The company now projects EBIT of €370 million to €395 million. Previously, it expected to reach an EBIT of €360 million to €380 million. Fresenius Helios fully confirms its sales outlook and projects organic sales growth of 3% to 5%.

*Adjusted for post-acute care clinic Zihlschlacht transferred to Fresenius Vamed.
**Net income attributable to shareholders of HELIOS Kliniken GmbH.

 
Fresenius Vamed
Fresenius Vamed offers engineering and services for hospitals and other health care facilities.

• Excellent organic sales growth of 12% at upper end of guidance
• Largest single turnkey project order in company history received
• 2013 guidance fully confirmed

Sales increased by 21% to €421 million (H1/2012: €348 million). Organic sales growth was 12%, acquisitions contributed 9%. Sales in the project business increased by 13% to €208 million (H1/2012: €184 million). Sales in the service business grew by 30% to €213 million (H1/2012: €164 million).

EBIT was €15 million (H1/2012: €14 million). The EBIT margin reached 3.6% (H1/2012: 4.0%).

Net income** was €9 million (H1/2012: €10 million).

Order intake increased to €311 million (H1/2012: €156 million). Fresenius Vamed received the largest single order in its history for a turnkey construction of an acute-care hospital in Austria, with a total volume of €173 million. As of June 30, 2013, the company's order backlog was €1,089 million (Dec. 31, 2012: €987 million).

Fresenius Vamed fully confirms its outlook for 2013 and expects to achieve sales growth of 8% to 12%. EBIT growth is projected in the range of 5% to 10%.

*Adjusted for post-acute care clinic Zihlschlacht transferred from Fresenius Helios to Fresenius Vamed.
**Net income attributable to shareholders of Vamed AG.

 

Analyst-/Investor Conference Call
As part of the publication of the results for the first half of 2013, a conference call will be held on July 30, 2013 at 2 p.m. CEST (8 a.m. EDT). All investors are cordially invited to follow the conference call in a live broadcast via the Internet at www.fresenius.com, see Investor Relations, Presentations. Following the call, a replay of the conference call will be available on our website.

Contact

Head of Corporate Communications
T +49 (0) 6172 608-96008
pr-fre@fresenius.com

Documents

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Fresenius Kabi has formed a joint venture with PT Soho Global Health, a leading Indonesian pharmaceutical company, acquiring a 51 percent stake in its PT Ethica Industri Farmasi (EIP) subsidiary. This joint venture will focus on I.V. generic drugs and infusion solutions, and make Fresenius Kabi the market leader in I.V. generics in Indonesia.

Founded in 1946, EIP was the first manufacturer of injectable drugs in Indonesia. The company has a broad product portfolio and extensive experience and expertise in the production and marketing of generic drugs in the Indonesian market. EIP operates a production plant in Jakarta. The product portfolio of the future joint venture generated sales of more than €40 million last year.

Demand for health care in Indonesia has been growing steadily and is expected to accelerate in the coming years due to the implementation of a universal health care program, starting in 2014. As a result, almost the entire Indonesian population, about 245 million, is set to have access to modern health care by 2019*, with the country's pharmaceutical market expected to double to €7.1 billion by 2018**. The joint venture therefore provides an attractive platform for Fresenius Kabi's future growth in one of the fastest-growing emerging economies in Southeast Asia.

"Entering the joint venture brings us valuable local manufacturing capabilities and a strong market presence to provide patients and health care professionals in Indonesia with immediate access to high quality, affordable drugs," said Mats Henriksson, Chairman of the Management Board of Fresenius Kabi. "At the same time, we will establish a strong hub for further expanding our business in the Southeast Asian region. Our partner has many years of experience and a very good reputation serving the Indonesian health care market."

Tan Eng Liang, President Commissioner of PT Soho Global Health, said: "We are excited to be cooperating with Fresenius Kabi, because of the perfect fit between the companies. This joint venture gives us the possibility of strengthening our leading position in our home market as well as capturing the growth opportunities in the region in a fast and sustainable way. Together, we can boost the product pipeline with numerous launches in 2014 and beyond."

The parties agreed not to disclose the purchase price. Closing of the transaction is expected in the third quarter of 2013.

* Source: Ministry of Health, Republic of Indonesia, 2012

** IMS Market Prognosis Sep 2012, Dataview Date © IMS HEALTH